Sanmina(US:SANM)2021-05-05 18:42Financial Performance - Net sales increased from $1.6 billion in Q2 2020 to $1.7 billion in Q2 2021, a growth of 6.9%[114] - Gross profit for Q2 2021 was $143.1 million, compared to $107.4 million in Q2 2020, reflecting improved operational efficiencies[114] - Operating income rose to $64.7 million in Q2 2021 from $24.4 million in Q2 2020, indicating stronger profitability[114] - The gross margin increased to 8.4% in Q2 2021 from 6.8% in Q2 2020, driven by cost reduction efforts[116] - CPS gross margin improved to 14.2% in Q2 2021 from 10.8% in Q2 2020, attributed to increased volume and favorable product mix[117] Customer Concentration - Sales to the ten largest customers accounted for approximately 55% of net sales, highlighting customer concentration risk[109] - The IMS segment represented about 80% of total revenue in the first half of 2021, underscoring its significance to overall performance[103] Expenses and Charges - Selling, General and Administrative expenses decreased to $61.1 million in Q2 2021, or 3.6% of net sales, down from $62.3 million in Q2 2020[119] - Selling, General and Administrative expenses decreased by $5.3 million from $125.4 million (3.7% of net sales) in the six months ended March 28, 2020, to $120.1 million (3.5% of net sales) in the six months ended April 3, 2021[120] - Research and Development expenses decreased by $0.4 million from $5.8 million (0.4% of net sales) in Q2 2020 to $5.4 million (0.3% of net sales) in Q2 2021[121] - Restructuring charges incurred were approximately $29 million, reflecting ongoing adjustments to operational strategies[108] - Restructuring charges incurred under the Q1 FY20 Plan amounted to approximately $29 million as of April 3, 2021, with expected total charges of up to $35 million[124] Cash Flow and Liquidity - Net cash provided by operating activities was $142.9 million for the six months ended April 3, 2021, compared to $156.9 million for the same period in 2020[133] - Cash and cash equivalents increased to $575 million as of April 3, 2021, from $481 million as of October 3, 2020[135] - The company generated $143 million of cash from operations in the second quarter of 2021[148] - The company believes its existing cash resources will be sufficient to meet working capital requirements for at least the next 12 months[149] Investments and Receivables - Net cash used in investing activities was $25.5 million for the six months ended April 3, 2021, compared to $44.5 million for the same period in 2020[138] - The company sold approximately $371 million and $1.1 billion of accounts receivable under its programs for the six months ended April 3, 2021, and March 28, 2020, respectively[143] - As of April 3, 2021, the company had $27 million of accounts receivable sold under the RPA that remained outstanding[144] Liabilities and Contingencies - The company had accrued liabilities of $16 million for restructuring costs as of April 3, 2021[126] - The company had accrued liabilities of $38 million related to legal proceedings and contingencies[146] - The company had a liability of $122 million for uncertain tax positions as of April 3, 2021[147] Financial Instruments - The company had outstanding interest rate swaps with an aggregate notional amount of $350 million as of April 3, 2021, with an effective interest rate of approximately 4.3%[145] - As of April 3, 2021, the company had outstanding foreign currency forward contracts with an aggregate notional amount of $399 million[156] - The company had forward contracts related to cash flow hedges in various foreign currencies in the aggregate notional amount of $110 million as of April 3, 2021[157] Future Outlook - The company expects component shortages to persist through at least the end of calendar 2021, potentially impacting revenue[106] - Days sales outstanding (DSO) increased from 54 days as of October 3, 2020, to 59 days as of April 3, 2021[134] - The company repurchased 0.4 million shares for $9 million during the six months ended April 3, 2021, compared to 2.7 million shares for $70 million in the same period of 2020[140]